According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, EUR/USD is now expected to navigate between 0.9900 and 1.0090 in the next weeks.
24-hour view: “We highlighted yesterday that ‘the rapid drop appears to be running ahead of itself but there is scope for EUR to test 0.9850’. However, EUR did not test 0.9850 as it dipped to 0.9874 before staging a surprising strong rebound (high has been 1.0010). The rebound has room to extend to 1.0030. The next resistance at 1.0080 is unlikely to come into view. Support is at 0.9970 followed by 0.9945.”
Next 1-3 weeks: “EUR rebounded strongly to a high of 1.0010 yesterday before closing higher by 0.98% (NY close of 0.9999), its largest 1-day advance in 3 months. The break of our ‘strong resistance’ level at 0.9980 indicates that the downside risk in EUR has dissipated. We view the current movement as part of a consolidation phase and expect EUR to trade between 0.9900 and 1.0090. Looking ahead, a clear break of 1.0090 would signal the start of a more sustained and sizeable recovery in EUR.”